By Kayla Lucas
According to Experian, 36% of people have student loan debt. This isn’t necessarily a bad thing as some debt like student loan debt sometimes can’t be avoided -- the problem lies in terms of how a lot of youth view credit. When asked about the common misconceptions about credit, Bradley University student Kailyn Bates says, “Before I learned about credit, I thought no credit was the same as good credit and so I thought you automatically started with a good credit score.” Some youth don’t know what credit is and others don’t know how to establish good credit. This isn’t good considering future employers may ask to run your credit in the hiring process. Why? They want to see if you’re responsible! Have no fear! You can build good credit.
Once you are a young adult and are working (usually age 21 and older or with enough income), there are many ways to build good credit. The first thing you need to do is to actually get credit. Some people get a card that can only be used at a certain store to limit purchases so you can only spend a little and it’ll be easier to pay of; others get a card that can be used at any store. Some who are opposed to getting a credit card might pay off student loans or get a credit building loan. (Some students become an authorized user on a trusted parent or guardian’s credit card who has good payment history, but be VERY careful about this as anything you do will impact the other person’s credit and vice versa . When in doubt or as a general a rule of thumb, avoid this and wait to get credit on your own.)
Next, you would want to check your credit. You can check your credit at each of the 3 credit reporting agencies once for free each year at annualcreditreport.com. You also want a good idea of what your credit score looks to see if you’re on the right track.
Finally, it is very important to keep your credit card usage to <30% of your credit limit. If your credit limit is $1,000 use only $300 of that limit at a time, and make sure to pay your balances in FULL. 83% of youth believe that being debt free is an attainable goal; be a part of this percent!